Global Economics

Xmas Tree Prices Soar on Chinese Demand

December 10, 2007

The German timber industry says rising export demand and the biofuel boom's effect on cropland are pushing up Christmas tree prices

The Christmas tree may be a quintessential symbol of Christmas, but it's also a natural resource. And, like other natural resources, it is subject to market forces -- forces which are pushing up prices in Germany.

According to the German timber industry's umbrella organization, the HDH, demand for Christmas trees is rising due to increasing exports and the growing number of single-person households. Meanwhile the supply of trees has decreased because several thousand hectares of tree plantations in Germany have been given over to more profitable uses, such as lucrative biofuel crops.

The Nordmann fir is proving particularly popular with the export market. The airline Lufthansa is already flying trees to Abu Dhabi and Dubai, while freshly felled trees are being transported in refrigerated containers to China. A Christmas tree decked out in the American style has become a status symbol in China, and many retail stores there are adopting the tradition.

"We don't have enough goods to keep up with Chinese demand," says Christian von Burgsdorff, who runs a Christmas tree company in the northern state of Schleswig-Holstein. Around 28 million Christmas trees were sold last year in Germany, the highest figure on record.

The Christmas tree is just the latest crop to be affected by the twin factors of the biofuel boom and increased Chinese demand. Prices of milk and other dairy products -- not to mention chocolate -- have increased in Germany in response to Chinese demand, while rising biofuel production has pushed up the prices of foodstuffs such as beer, pasta and even gummy bears.

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